Real Estate Gets Real

Real estate is one big part of the franchise equation. Picking the right site is crucial when it comes to the success of a new franchise location. Brands have adapted by reaching beyond their typical model, opening in airports, big box stores, gas stations, convenience stores and even food trucks. Below are concepts that have broken their real estate barriers and succeeded. Brands in Big Box Stores Tampa-based burger chain Checkers*/Rally’s Drive-In Restaurants is most commonly recognized for their double drive-through model, but three years ago the brand challenged their traditional prototype by exploring in-line locations, conversions and captive audience environments. “When we began reevaluating our model, we decided to modify our free standing design, allowing us to take the cost out and make the sales to investment ratio extremely appealing,” Jennifer Durham, Vice President of Franchise Development for Checkers/Rally’s said. Durham noted that the new free standing design has a sales-to-investment ratio of 2.40 versus their traditional double drive-through prototype which has a ratio of 1.56. Checkers currently has two locations within Walmart and plans to add four additional units over the next year. Durham says that the demographic profile of Walmart customers aligns perfectly with Checkers/Rally’s core demographic of customers - people who appreciate quality and value. The brand also expanded their reach by opening in airports, college campuses and kiosks across the country. With the flexibility in real estate venues, Checkers has experienced incredible growth over the past year with 10 new locations open in 2013 alone. Auntie Anne’s and McDonald’s also have locations within different Walmart locations while Pret A Manger, a prepared foods café, recently opened in Target. The Food Truck Phenomenon  

Food trucks (trailers) have become a widely popular phenomenon and have seen a significant rise in popularity in the last two years. Initially regaining momentum in Austin, San Francisco, Portland and New York, food trucks are now popping up all of the United States. In fact, not only are independent, gourmet restaurateurs and street food vendors using food trucks because of the simplicity and flexibility the model offers, but larger brands are beginning to experiment with the concept. Carl’s Jr. was at the forefront of the “corporate food truck” craze, originally opening the first trailer in 1990; now, other chains like Taco Bell, Applebee’s and Chick-fil-A are exploring the model. Pita Pit, a healthy alternative to fast food, recently opened their first food truck adjacent to the food court at Norfolk Navy Base in Norfolk, Va. Originally interested in adding a unit within the food court, the brand was left to seek alternatives due to lack of available space. “Not only was it an opportunity to differentiate ourselves, but it provided us a temporary alternative while waiting for a more permanent space in the food court,” Corey Bowman, Vice President of Franchise Growth for Pita Pit said. Bowman added that their product was well positioned for a food truck concept; each Pita Pit requires only a refrigerator, triple sink and prep table. The adaptability and simplicity of the model has allowed Pita Pit to open in spaces that other restaurant brands have struggled with. Thus far, the sales of the food truck have been outstanding – persuading the brand to look into opening another food truck in Nashville. Beginning their concept near college campuses, Pita Pit has pursued additional real estate venues such as drive-through locations, food trucks, convenience stores and even gas stations. Regardless of the model or unique space, several factors contribute to picking the right site and should be analyzed thoroughly before signing a lease, including the size of the city’s population, foot and car traffic, visibility from major highways, operational capacity, sales-to-investment ratio and competition. Ultimately, flexibility is key, and brands with utility have seen great success. Perhaps it’s time for all brands to start thinking outside the confines of traditional real estate and capitalize on out-of-the-box concepts.